Do I need to pay preliminary tax on foreign deposit income?

C

chronic

New Member
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I opened a few foreign deposit accounts during 2023 and have already received some interest from these. All of my other income is PAYE and the foreign deposit interest I expect to earn annually is well below €5,000. I plan to submit a Form 12 tax return.

From reviewing this website and Revenue's own site, I see that preliminary tax for the year 2023 is due to be paid by 31/10/2023 and seems to cover income tax, PRSI, and USC. The focus of advice online is understandably on Form 11 taxpayers and how Revenue go about collecting labour income taxes promptly. Otherwise, the guidance on preliminary tax seems quite generic and unhelpful for my case.

Do I need to pay preliminary tax on 2023 foreign interest income (or expected interest for the year) by 31/10/2023? Or do I have until 31/10/2024 to fill out a Form 12 and pay outstanding DIRT for the year 2023?

If there is no clear guidance from Revenue, what do AAM posters do when declaring foreign deposit income?
 
You would be expected to pay preliminary income tax, but I wouldn't worry about it if the amount is small

You will probably find that your tax credits will be adjusted to collect the DIRT due on the foreign interest income, but as I am a chargeable person and submit a Form 11 on ROS, I do not know definitely

In any case, preliminary tax due the first year is zero as it is based on the previous year's amount
 
I’m in a similar position for 2023. So will have foreign (EU) deposit income less than €5,000 paid without deduction of DIRT and all other income subject to PAYE. In Jan 2024 I will log onto MY ACCOUNT on revenue.ie and add details of foreign deposit income. That way when my balancing statement is issued the liability will be dealt with. Definitely no need to pay any preliminary tax.
I’ll face a different situation in respect of 2024 as my foreign deposit income will exceed €5,000. So I’ll be heading down the Form 11 route.
 
I use ROS and form 11, even though my only non-PAYE income most years is a small amount of EU deposit interest. I started this way back in about 2011 (not sure if I picked the correct option back then to use Form 11, but stuck with it now). Each year I also make a one-off direct AVC to my pension fund (i.e. not through payroll with tax relief at source). I make sure that the tax due back on the AVC is greater than the tax due on the deposit interest so that Revenue owes me money (or alternatively, if applicable, claim tax back on health expenses). That way I never make a preliminary payment. Never had an issue so far.

My interest is way less than €5,000. May not be feasible to do this if you are receiving such large sums in interest.
 
Why do Revenue want details of Irish interest earned on a tax return?
DIRT is already deducted at source.
 
fistophobia said:
Why do Revenue want details of Irish interest earned on a tax return?
DIRT is already deducted at source.
Click to expand...
It's not unusual for them to want/require an individual to file a return where tax has already been paid or there is no tax due. E.g. tax exempt rent a room income must be declared. Also, deposit interest income may impact other aspects of one's tax/PRSI/USC liabilities depending on the amount earned.
 
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